Gary Cohn says Trump doesn’t believe that tariffs will cause higher prices

Gary Cohn was a moderating influence in Trump’s first term and was his chief economic advisor. He’s no longer working with Trump but he can speak to the President’s thinking around tariffs as they surely discussed them many times.

“I think he fundamentally understands, he just doesn’t believe, and he can believe this — I don’t agree with him — that it doesn’t get passed on to the consumer,” Cohn told Axios.

“There’s the fundamental difference between my view on tariffs and his view on tariffs: I believe that a tariff is a consumption tax. It’s a VAT. You call it what you want,” said Cohn, the former president of Goldman Sachs. “If you bring something to the border and all of the sudden the importer pays a tax — the importer doesn’t eat it, the retailer doesn’t eat it, the consumer eats it.”

Trump’s view highlights the risk that he will implement tariffs, especially as a way to extend tax cuts that will need to be paid for.

This article was written by Adam Button at www.forexlive.com.